Working Paper: NBER ID: w26476
Authors: Daniel L. Dench; Theodore J. Joyce
Abstract: Hoynes, Miller and Simon (2015), henceforth HMS, report that the national expansion of the Earned Income Tax Credit (EITC) is associated with decreases in low birth weight. We question their findings. HMS’s difference-in-differences estimates are unidentified in some comparisons, while failed placebo tests undermine others. Their effects lack a plausible mechanism as the association between the EITC and prenatal smoking also fails placebo tests. We contend that the waning of the crack epidemic is a possible confound, but we show that any number of policies directed at poor women also eliminate the effect of the EITC when aggregated to the national level. Identifying small, causal effects of a national policy at a single point in time is exceedingly challenging.
Keywords: Earned Income Tax Credit; infant health; low birth weight; difference-in-differences
JEL Codes: H24; I38; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| crack epidemic decline (F44) | low birth weight (J13) |
| EITC (H26) | prenatal smoking rates (J13) |
| EITC (H26) | low birth weight (J13) |